Money lending not paid back
Querist :
Anonymous
(Querist) 26 February 2010
This query is : Resolved
I lended money to a person for 2rs interst per month. He has not paid money.
We have written on bond paper about principle amount and interst rates.
Now is not paying money back.
if i go to court now, they may take 2 or more years to process the case.
my question is, for this two years also, i can get interst amount on the principle amount?
Arvind Singh Chauhan
(Expert) 26 February 2010
Dear anonymous money lending in interest without license is it self illegal.
A V Vishal
(Expert) 26 February 2010
YOU CAN FILE A CIVIL SUIT FOR RECOVERY OF MONEY HOWEVER, THE RATE OF INTEREST AT WHICH YOU OFFERED WILL NOT BE CONSIDERED AND THE COURT MAY FIX A SUITABLE RATE SAY 12, 15 OR 18% SIMPLE INTEREST SINCE YOU ARE NOT SUPPOSED TO COLLECT COMPOUND INTEREST. FURTHER THE INTEREST WILL BE CHARGED TILL THE LOAN AMOUNT IS FULLY PAID TO YOU.
Parveen Kr. Aggarwal
(Expert) 27 February 2010
Mr. Anonymous,
First of all, if you have a written contract, the suit may not take two years in its decision because you can file suit under Order 37 of the Code of Civil Procedure, 1908 providing for summary procedure and in case the defendant is not granted leave to defend the suit, your suit will be decreed at a very early date. The limitation period for applying for leave to defend by a defendant is just 10 days.
Secondly, it is the discretion of the Court to award interest at the rate finding appropriate. Section 34 of the CPC provides that where and in so far as a decree is for the payment of money, the Court may, in the decree, order interest at such rate as the Court deems reasonable to be paid on the principal sum adjudged, from the date of the suit to the date of the decree, in addition to any interest adjudged on such principal sum for any period prior to the institution of the suit, with further interest at such rate not exceeding six per cent, per annum as the Court deems reasonable on such principal sum from the date of the decree to the date of payment, or to such earlier date as the Court thinks fit, Provided that where the liability in relation to the sum so adjudged had arisen out of a commercial transaction, the rate of such further interest may exceed six per cent, per annum, but shall not exceed the contractual rate of interest or where there is no contractual rate, the rate at which moneys are lent or advanced by nationalised banks in relation to commercial transactions.
